Yes, you can exchange multiple properties into one through a 1031 exchange, and this is a strategy that many investors use to consolidate their real estate holdings or to trade up into a larger, more valuable property. The IRS allows for the exchange of multiple properties for a single replacement property, as long as the transaction meets the requirements set forth under Section 1031 of the Internal Revenue Code.

When engaging in a 1031 exchange involving multiple properties, the key is to ensure that the total value of the relinquished properties is equal to or greater than the value of the replacement property. Additionally, the properties involved must be held for productive use in a trade or business or for investment purposes, and they must be like-kind, which generally means they are of the same nature or character, even if they differ in grade or quality.

Here's an example to illustrate how this works:

Imagine you own three rental properties, each valued at $200,000, for a total of $600,000. You decide to consolidate your investments by exchanging these three properties for a single commercial property valued at $600,000. To facilitate this exchange, you would use Deferred.com as your qualified intermediary.

1. Relinquished Properties: You sell the three rental properties for a total of $600,000. The sales proceeds are held by Deferred.com, acting as your qualified intermediary, to ensure you do not have constructive receipt of the funds, which is crucial for maintaining the tax-deferred status of the exchange.
2. Identification Period: Within 45 days of selling the relinquished properties, you must identify the replacement property. In this case, you identify a commercial property worth $600,000.
3. Replacement Property: You must acquire the identified replacement property within 180 days of selling the relinquished properties. Deferred.com will use the proceeds from the sale of your rental properties to purchase the commercial property on your behalf.
4. Closing the Exchange: Once the commercial property is acquired, Deferred.com transfers the title to you, completing the exchange. Since the value of the replacement property is equal to the total value of the relinquished properties, and all proceeds were reinvested, you successfully defer capital gains taxes on the transaction.

By using Deferred.com as your qualified intermediary, you ensure that the exchange is structured correctly and complies with IRS regulations, allowing you to defer taxes and potentially increase your investment's value. This strategy can be particularly beneficial for investors looking to simplify their portfolio or invest in a more lucrative property without incurring immediate tax liabilities.